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1. LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR, [1997] 2 MLJ 565
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 LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR
CaseAnalysis
| [1997] 2 MLJ 565

LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR [1997] 2 MLJ 565
Malayan Law Journal Reports · 24 pages

FEDERAL COURT (KUALA LUMPUR)

ANUAR CJ (MALAYA), MOHD AZMI FCJ AND GOPAL SRI RAM JCA
CIVIL APPEAL NOS 02-669, AND 670 OF 1993
5 May 1996

Case Summary
Civil Procedure — Judgment — Default judgment — Setting aside — Claim for specific relief — Plaintiffs
did not serve statement of claim after service of writ — Defendant did not enter appearance — Judgment in
default of appearance entered — Non-compliance with O 13 r 6(1) — Whether plaintiff relieved from
delivering his statement of claim — Whether default judgment was merely irregular or a nullity — Whether
defendant ought to be allowed to appear upon the motion for judgment to argue that discretion ought not
be exercised in plaintiffs' favour — Whether default judgment ought to be set aside — Rules of the High
Court 1980 O 13 r 6(1) & O 2 r 1(1)

Civil Procedure — Damages — Assessment of damages — Absence of judgment granting damages —

Whether judgment for the assessment of damages ought to be set aside
Civil Procedure — Estoppel — Against the defendants for contesting the action — Whether the defendants
had by their conduct led the plaintiffs to believe that the action will not be defended — Whether the
plaintiffs were guilty of unconscionable conduct and this had the effect of releasing the defendants from
any estoppel — Whether the defendant can now challenge the default judgment entered against them

Civil Procedure — Pleadings — Striking out writ — Whether writ ought to be struck out — Rules of the High
Court 1980 O 18 r 19

The appellants ('the plaintiffs') caused to be issued a writ against the respondents ('the defendants') on which there
was indorsed a claim for several declarations and injunctions; there was also a claim for damages. The plaintiffs
subsequently moved exparte for several interim injunctions and the learned judge granted the interim relief sought
with a direction that the application be heard inter partes on a fixed date. On 28 November 1991, when the
summons was called on for hearing, counsel for the plaintiffs informed the learned judge that the first defendant's
solicitor had advised the first defendant not to defend the action and that neither he nor his client would be
appearing at the hearing of the summons. The plaintiffs' counsel then moved the court for an order that the interim
injunction be made absolute against both the defendants. He also applied for an order requiring the registrar to
assess damages and the learned judge granted the same.

Subsequently on 2December 1991, the plaintiffs' solicitors filed a certificate of non-appearance, and entered a form
of judgment in default in which all the relief claimed in the indorsement to the writ was granted ('the judgment in
default').

On 28 January 1992, the defendants purported to enter appearance. Thereafter on 31 January 1992, the
defendants took out a summons by which they sought to set aside only so much of the order as directed on
assessment of damages. [*566]

This was followed by a second summons dated 1 April 1992, by which the defendants applied to have the writ
struck out on the ground that the indorsement upon it did not disclose any cause of action. Subsequently, upon
 Page 2 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

hearing both the summonses, the learned judge set aside the whole of the judgment in default and he also struck
out the writ. The plaintiffs appealed against the orders, ie setting aside the judgment in default ('the first appeal')
and striking out of the writ ('the second appeal'). The plaintiffs argued, inter alia: (i) the learned judge was wrong in
setting aside the whole of the judgment, when the summons before him sought to set aside only so much of the
judgment that directed the assessment of damages; and (ii) it was not open to the defendants, having encouraged
the plaintiffs to believe that the action would not be contested, to challenge a judgment entered in the proceedings,
however irregular that judgment might be. The defendants submitted that the judgment in default was a nullity and
therefore, the appearance entered on 28 January 1992 was good.

Held, dismissing the first appeal and allowing the second appeal:

(1) (Per Mohd Azmi FCJ) The discretion available to the court to cure irregularities under O 2 r 1(1) of the
Rules of the High Court 1980 ('the RHC') read together with ss 69(4) and 101 of the Courts of Judicature
Act 1964 should only be undertaken by the court in the absence of prejudice. Thus defects affecting merits
or the jurisdiction of the court ought not to be cured in the exercise of the discretionary power.
2 On the facts, it was clear that the judgment in default (the subject matter of the first appeal) was irregular
for non-compliance with the RHC – in particular O13r6(1) – by failing to serve a statement of claim on the
defendants. On this ground alone, the entire judgment in default ought to be set aside. There can be no
dispute that the procedural irregularity in the failure to serve the statement of claim on the defendants
before the judgment in default was entered, just as the order to assess damages in the absence of
judgment granting damages, had prejudiced the defendants and therefore beyond curability (see p
575D—G); Nicholls v Nicholls [1997] The Times, 21 January; 147 NLJ 61 followed.

(Per Gopal Sri Ram JCA) A judgment in default of appearance entered by a plaintiff or, for that matter, a
counterclaiming defendant, in breach of the terms of O 13 r 6(1) of the RHC may be set aside ex debito justitiae. In
this case, there was no doubt that the judgment in default obtained was fundamentally flawed. Although a court
may grant leave to enter judgment in disregard of the provisions of O13r6(1) to prevent a defendant from abusing
the court's process by resorting to that rule, there was no room to apply that principle in the present case.

The philosophy underlying O 13 r 6(1) of the RHC is that specific relief is, by its very nature, discretionary. A
defendant [*567]
may well decide not to defend an action in which such relief is claimed in the honest belief that he has no defence
upon question of liability. But that does not relieve the plaintiff from delivering his statement of claim and satisfying
the court, upon a motion for judgment, that the case is a fit one for the grant of specific relief.

Therefore, a defendant who has failed to enter an appearance to an action for specific relief is not precluded from
contending at the hearing of the motion for judgment that the particular case is one in which discretion should be
exercised against the plaintiff and that specific relief ought to be denied him. Order 13 r 6(1) exists to preserve the
discretion of the court in actions for specific relief despite the non-appearance of a defendant. To deprive a
defendant of the right of appearing upon the motion for judgment and arguing that discretion ought not to be
exercised in a plaintiff's favour constitutes a breach of a substantive right forming part and parcel of the doctrine of
procedural fairness to which he is entitled. And the entry of a form of judgment in default in a case to which O 13 r
6(1) applies has the effect of withholding, from a defendant, without the court's sanction, the procedural fairness to
which he is entitled (see pp 581E—F, I and 582B—G); Lam Kong Co Ltd v Thong Guan & Co (Pte) Ltd [1985] 2
MLJ 429 followed; Stewart Chartering Ltd v C & O Managements SA & Ors [1980] 1 All ER 718 and Jet West Ltd &
Anor v Haddican & Ors [1992] 1 WLR 487 distinguished.

(3) (Per Gopal Sri Ram JCA) This was a case in which the plaintiffs had absolutely no right whatsoever to
obtain an order for the assessment of damages as there was no judgment for damages against the
defendants on 28 November 1991. It is elementary law that there can be no assessment of damages in the
absence of a judgment granting damages. Such a judgment did not come until 2 December 1991. The
judgment for the assessment of damages was found in a judgment which was flawed in other respects.
The learned judge was therefore perfectly entitled, in the interests of justice, to take cognizance of the
breach of O13r6(1) and to set aside the whole of the offending judgment (see pp 582I and 583A—B).
(4) (Per Gopal Sri Ram JCA) In the context of litigation, the doctrine of estoppel usually arises where a party
to an action has at least two alternatives and mutually exclusive courses open to him if by words or
conduct he elects to pursue one of them and thereby leads his opponent to believe that he has abandoned
the other; he may, if the circumstances so warrant, be precluded from later changing course. The plaintiffs
in this case were guilty of unconscionable conduct and this had the effect of releasing the defendants from
 Page 3 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

any estoppel that might have held them in its grip. Once thus released, the parties were placed on an equal
footing viz-a-viz the litigation. Thereafter, it was open to the defendants to pursue any and all courses
made available to them [*568]
by adjectival law to rid themselves of the offending judgment. Therefore, the learned judge was correct in
setting aside the whole of the judgment in default obtained by the plaintiffs on 2December 1991 (see pp
583D and 586H—I).
(5) (Per Gopal Sri Ram JCA) There is no dearth of authority dealing with the approach that a court should
take when exercising its summary jurisdiction under O 18 r 19. The unanimous view is that the summary
power ought not to be invoked save in a plain and obvious case. An examination of the record provided
demonstrated that this was not such a case. There were several issues of law that required mature
consideration. And there were several issues of fact that were capable of resolution only after taking viva
voce evidence. There was therefore no justification for striking out the writ in this case (see p 588G—I);
Bandar Builder Sdn Bhd & Ors v United Malayan Banking Bhd [1993] 3 MLJ 36 followed.

Obiter

(Per Gopal Sri Ram JCA) Orders and judgments made or entered by a court, in private litigation, in the exercise of
its coercive power upon the default of a party to a suit, even when made or entered in breach of a rule of court or of
practice, are merely irregular. They are not nullities. Any proceedings commenced, or any order or judgment
obtained, in breach of a rule of court is always subject to the curative power of the court available under O 2 r 1 of
the RHC.

The proper approach is for a court to accept that a breach of a rule of court renders the particular proceeding
irregular with a power in the court to excuse the non-compliance. That power is to be exercised judicially having
regard to the substantial merits of a case and having particular regard to the interests of justice. Ultimately, it is the
objective perception of a court as to where the justice in a particular case lies that determines whether the
irregularity should be cured. Therefore, it was not open to the defendants in this case to treat themselves as not
being bound by the default judgment of 2December 1991 (see pp 578B—G and 579A); Metroinvest Ansalt v
Commercial Union Assurance Co Ltd [1985] 2 All ER 318 followed.

Bahasa Malaysia summary

Perayu-perayu ('plaintif-plaintif') menyebabkan suatu writ dikeluarkan terhadap penentang-penentang ('defendan-

defendan') di mana tuntutan untuk beberapa perisytiharan dan injunksi diindorskan; terdapat juga satu tuntutan
untuk ganti rugi. Plaintif-plaintif selanjutnya memohon secara exparte untuk beberapa injunksi interim dan hakim
yang arif memberikan relief interim yang dipohon dengan arahan supaya permohonan didengar secara inter partes
pada tarikh yang ditetapkan. Pada 28 November 1991, apabila saman dipanggil untuk pembicaraan, peguam
plaintif-plaintif memberitahu hakim yang arif bahawa peguamcara defendan pertama telah menasihati defendan
[*569]
pertama supaya tidak membela tindakan itu dan bahawa baik beliau sendiri mahupun kliennya tidak akan hadir di
pembicaraan saman. Peguam plaintif-plaintif kemudiannya memohon kepada mahkamah untuk satu perintah
bahawa injunksi interim dijadikan mutlak terhadap kedua-dua defendan. Beliau juga memohon untuk satu perintah
yang menghendaki pendaftar menaksir ganti rugi dan hakim yang arif membenarkan permohonan ini.

Berikutnya pada 2Disember 1991, peguamcara plaintif-plaintif memfailkan satu sijil ketidakhadiran, dan
memasukkan borang penghakiman ingkar dalam mana kesemua relief yang dituntut dalam pengindorsan kepada
writ diberikan ('penghakiman ingkar').

Pada 28 Januari 1992, defendan-defendan kononnya memasukkan kehadiran. Selepas ini pada 31 Januari 1992,
defendan-defendan telah mengambil saman yang meminta supaya bahagian perintah seperti yang diarahkan atas
taksiran ganti rugi diketepikan.

Ini disusuli oleh saman yang kedua bertarikh 1 April 1992, di mana defendan-defendan memohon agar writ
dibatalkan atas alasan bahawa pengindorsan padanya tidak mendedahkan sebarang kausa tindakan. Berikutnya,
selepas mendengar kedua-dua saman, hakim yang arif mengetepikan keseluruhan penghakiman ingkar dan beliau
juga membatalkan writ. Plaintif-plaintif merayu terhadap perintah-perintah, iaitu mengetepikan penghakiman ingkar
('rayuan pertama') dan membatalkan writ ('rayuan kedua'). Plaintif-plaintif berhujah, antara lain: (i) hakim yang arif
adalah salah dalam mengetepikan keseluruhan penghakiman apabila saman di hadapannya hanya memohon agar
bahagian penghakiman yang mengarah taksiran ganti rugi diketepikan; dan (ii) ia tidak terbuka kepada defendan-
 Page 4 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

defendan, selepas menggalakkan plaintif-plaintif mempercayai bahawa tindakan itu tidak akan ditentang, untuk
mencabar suatu penghakiman yang dimasukkan dalam prosiding, walau bagaimana luar aturan pun penghakiman
itu. Defendan-defendan berhujah bahawa penghakiman ingkar adalah suatu pembatalan dan dengan itu, kehadiran
yang dimasukkan pada 28 Januari 1992 adalah elok.

Diputuskan, menolak rayuan pertama dan membenarkan rayuan kedua:

(1) (Oleh Mohd Azmi HMP) Budi bicara yang boleh digunakan oleh mahkamah bagi membetulkan luar aturan
di bawah A 2 k1(1) Kaedah-Kaedah Mahkamah Tinggi 1980 ('KMT') dibaca bersama dengan ss 69(4) dan
101 Akta Mahkamah Kehakiman 1964 hanya patut dijalankan oleh mahkamah dalam ketiadaan
prasangka. Justeru itu kecacatan yang menjejaskan merit atau bidang kuasa mahkamah tidak patut
dibetulkan dalam pelaksanaan kuasa budi bicara.
Atas fakta-fakta, adalah jelas bahawa penghakiman ingkar (perkara subjek rayuan pertama) adalah luar
aturan atas ketidakpatuhan KMT, khususnya A 13k6(1), kerana gagal menyampaikan pernyataan tuntutan
kepada defendan-defendan. [*570]
Atas alasan ini sahaja, keseluruhan penghakiman ingkar patut diketepikan. Tidak boleh dipertikaikan
bahawa luar aturan secara prosedur dalam kegagalan menyampaikan pernyataan tuntutan kepada
defendan-defendan sebelum penghakiman ingkar dimasukkan, seperti mana dengan perintah untuk
menaksir ganti rugi dalam ketiadaan penghakiman yang memberikan ganti rugi, telah memudaratkan
defendan-defendan dan dengan itu ia tidak dapat dibetulkan (lihat ms 575D—G); Nicholls v Nicholls [1997]
The Times, 21 Januari; 147 NLJ 61 diikut.
(2) (Oleh Gopal Sri Ram HMR) Penghakiman ingkar kehadiran yang dimasukkan oleh plaintif, atau defendan
yang menuntut balas, yang melanggar terma A 13 k 6(1) KMT boleh diketepikan secara ex debito justitiae.
Dalam kes ini, tiada keraguan bahawa penghakiman ingkar yang diperolehi adalah cacat pada dasarnya.
Walaupun mahkamah boleh memberikan kebenaran untuk memasukkan penghakiman tanpa
mengendahkan peruntukan A13k6(1) bagi menghalang defendan daripada menyalahgunakan proses
mahkamah dengan menggunakan kaedah itu, tiada ruang untuk memakai prinsip tersebut dalam kes ini.
Falsafah di bawah A 13 k 6(1) KMT ialah bahawa relief spesifik adalah, atas sifatnya sendiri, berdasarkan
budi bicara. Seseorang defendan mungkin tidak akan membela sesuatu tindakan dalam mana relief
sedemikian dituntut dalam kepercayaan jujur bahawa dia tidak mempunyai sebarang pembelaan atas
persoalan liabiliti. Tetapi itu tidak melepaskan plaintif daripada menyampaikan pernyataan tuntutannya dan
memuaskan mahkamah, pada suatu usul untuk penghakiman, bahawa kes itu adalah kes di mana relief
spesifik wajar diberikan.
Maka, defendan yang telah gagal memasukkan kehadiran kepada tindakan untuk relief spesifik tidak
dihalang daripada menghujahkan di pembicaraan usul untuk penghakiman bahawa kes berkenaan adalah
suatu kes di mana budi bicara harus dilaksanakan terhadap plaintif dan bahawa relief spesifik harus
dinafikan kepadanya. Aturan 13 k 6(1) wujud bagi mengekalkan budi bicara dalam tindakan untuk relief
spesifik meskipun defendan tidak hadir. Melucutkan hak defendan untuk hadir di usul untuk penghakiman
dan menghujahkan bahawa budi bicara tidak patut dilaksanakan memihak kepada plaintif merupakan suatu
kemungkiran hak substantif yang membentuk sebahagian daripada doktrin keadilan prosedur yang dia
berhak dapat. Dan kemasukan borang penghakiman ingkar dalam kes kepada mana A 13 k 6(1) terpakai
mempunyai kesan menahan keadilan prosedur seorang defendan berhak mendapat tanpa kebenaran
mahkamah (lihat ms 581E—F, I dan 582B—G); Lam Kong Co Ltd v Thong Guan & Co (Pte) Ltd [1985] 2
MLJ 429 diikut; Stewart Chartering Ltd v C & O Managements SA & Ors [1980] 1 All ER 718 dan Jet West
Ltd & Anor v Haddican & Ors [1992] 1 WLR 487 dibeza. [*571]
(3) (Oleh Gopal Sri Ram HMR) Ini merupakan suatu kes dalam mana plaintif-plaintif tidak mempunyai apa-
apa hak sama sekali untuk mendapatkan perintah taksiran oleh kerana tiada penghakiman untuk ganti rugi
terhadap defendan-defendan pada 28 November 1991. Adalah undang-undang asas bahawa tidak boleh
terdapat taksiran ganti rugi dalam ketiadaan penghakiman yang memberikan ganti rugi. Tiada
penghakiman demikian sehingga 2 Disember 1991. Penghakiman untuk taksiran ganti rugi didapati dalam
penghakiman yang tidak elok dalam beberapa segi. Oleh itu, hakim yang arif memang berhak, dalam
kepentingan keadilan, untuk mengambil perhatian tentang kemungkiran A13k6(1) dan untuk mengetepikan
kesemua penghakiman yang silap (lihat ms 582I dan 583A—B).
(4) (Oleh Gopal Sri Ram HMR) Dalam konteks litigasi, doktrin estopel biasanya timbul di mana sesuatu pihak
kepada tindakan mempunyai sekurang-kurangnya dua alternatif dan cara saling eksklusif yang terbuka
kepadanya jika dengan perkataan atau tingkahlaku dia memilih untuk menggunakan salah satu dan
 Page 5 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

dengan itu membuat penentangnya mempercayai bahawa dia telah meninggalkan yang lagi satu; dia
boleh, jika keadaan memerlukan begitu, dihalang daripada menukar haluan kemudiannya. Plaintif-plaintif
dalam kes ini bersalah atas kelakuan yang tidak berpatutan dan ini mempunyai kesan membebaskan
defendan-defendan daripada sebarang estopel yang mungkin telah mengawal mereka. Sebaik sahaja
dilepaskan, pihak-pihak diletakkan dalam kedudukan yang sama berhubung dengan litigasi. Selepas itu, ia
terbuka kepada defendan-defendan untuk menggunakan mana-mana dan kesemua cara yang disediakan
oleh undang-undang adjektif bagi melepaskan diri daripada penghakiman yang silap itu. Maka, hakim yang
arif adalah betul dalam mengetepikan keseluruhan penghakiman ingkar yang didapatkan oleh plaintif-
plaintif pada 2Disember 1991 (lihat ms583D dan 586H—I).
(5) (Oleh Gopal Sri Ram HMR) Tiada kekurangan autoriti yang membincangkan pendekatan yang harus
diambil oleh sebuah mahkamah ketika melaksanakan bidang kuasa terus di bawah A18 k 19. Pandangan
sebulat suara adalah bahawa kuasa terus tidak patut digunakan kecuali dalam kes yang jelas dan nyata.
Pemeriksaan rekod yang disediakan menunjukkan bahawa ini bukanlah kes sedemikian. Terdapat
beberapa isu undang-undang yang memerlukan pertimbangan serius. Dan terdapat beberapa isu fakta
yang boleh diselesaikan hanya selepas mengambil keterangan viva voce. Dengan itu, tiada justifikasi
untuk membatalkan writ dalam kes ini (lihat ms 588G—I); Bandar Builder Sdn Bhd & Ors v United Malayan
Banking Bhd [1993] 3 MLJ 36 diikut.

Obiter

(Oleh Gopal Sri Ram HMR) Perintah dan penghakiman yang dibuat atau dimasukkan oleh mahkamah, dalam
litigasi [*572]
persendirian, dalam pelaksanaan kuasa memaksanya atas keingkaran suatu pihak kepada sesuatu guaman,
jikapun dibuat atau dimasukkan melanggar kaedah mahkamah atau amalan, adalah semata-mata luar aturan.
Mereka bukanlah pembatalan. Apa-apa prosiding yang dimulakan, atau apa-apa perintah atau penghakiman yang
diperolehi yang memungkir kaedah mahkamah adalah selalu tertakluk kepada kuasa kuratif mahkamah yang boleh
didapati di bawah A 2 k 1 KMT.

Pendekatan yang betul adalah untuk mahkamah menerima bahawa suatu kemungkiran kaedah mahkamah
menyebabkan prosiding berkenaan luar aturan dengan kuasa dalam mahkamah untuk memaafkan ketidakpatuhan.
Kuasa itu harus dilaksanakan secara adil dengan mengambil kira sebahagian besar merit sesuatu kes dan dengan
menitikberatkan kepentingan keadilan. Pada asasnya, ia merupakan tanggapan objektif sesebuah mahkamah di
mana terletaknya keadilan sesuatu kes tertentu yang menentukan sama ada luar aturan harus dibetulkan. Oleh
yang demikian, ia tidak terbuka kepada defendan-defendan dalam kes ini untuk menganggap diri mereka sebagai
tidak diikat oleh penghakiman ingkar bertarikh 2Disember 1991 (lihat ms578B—G dan 579A); Metroinvest Ansalt v
Commercial Union Assurance Co Ltd [1985] 2 All ER 318 diikut.]

Notes

For cases on judgment in default, see 2 Mallal's Digest (4th Ed, 1994Reissue) paras 1849-1868.

For cases on damages, see 2 Mallal's Digest (4th Ed, 1994 Reissue) paras 1097-1103.

For cases on estoppel, see 2 Mallal's Digest (4th Ed, 1994 Reissue) paras 1208-1245.

For cases on striking out a writ, see 2 Mallal's Digest (4th Ed, 1994Reissue) paras 2749-2753.

Cases referred to

Bandar Builder Sdn Bhd & Ors v United Malayan Banking Bhd [1993] 3 MLJ 36 (folld)

Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 (refd)

Bramblevale Ltd, Re [1970] Ch 128 (refd)

Evans v Bartlam [1937] AC 473 (refd)

Fira Development Sdn Bhd v Goldwin Sdn Bhd [1989] 1 MLJ 40 (refd)
 Page 6 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

Jet West Ltd & Anor v Haddican & Ors [1992] 1 WLR 487 (distd)

Lam Kong Co Ltd v Thong Guan & Co (Pte) Ltd [1985] 2 MLJ 429 (folld)

Langdale & Anor v Danby [1982] 1 WLR 1123 (refd)

Lim Hean Pin v Thean Seng Co Sdn Bhd [1992] 2 MLJ 10 (refd)

Meng Leong Development Pte Ltd v Jip Hong Trading Co Pte Ltd [1985] 1 MLJ 7 (refd)

Metroinvest Ansalt & Ors v Commercial Union Assurance Co Ltd [*573]

[1985] 2 All ER 318 (folld)

Nicholls v Nicholls The Times, 21 January; [1997] 147 NLJ 61 (folld)

Norwich Pharmacal Co & Ors v Customs and Excise commissioners [1974] AC 133 (refd)

Stewart Chartering Ltd v C & O Managements SA & Ors [1980] 1 All ER 718 (distd)

Wee Choo Keong v MBf Holdings Bhd & Anor [1993] 2 MLJ 217 (refd)

Legislation referred to

Administration of Justice Act 1960s 13(3)

Rules of the High Court 1980O 2 r 1(1), O 13 r 8, O 29 r 1(2B)

Rules of the Supreme CourtO 59 r 10(3) [Eng]

Appeal from

Civil Suit No 22–153 of 1991 (High Court, Seremban)

CV Das (Pretam Singh with him) (Stanley Ponniah Ng & Soo) for the appellants.

Lim Kem Thuan (Lim Kem Thuan & Co) for the respondents.

MOHD AZMI FCJ

5 May 1997

On 22 April 1996, this court had unanimously dismissed the plaintiffs' first appeal against an order of the High Court
at Seremban dated 23 October 1993 which had set aside a judgment in default of appearance obtained by them
against the defendants on 2 December 1991 (FCCA 02-669-1993) but had allowed their second appeal (FCCA 02-
670-1993) against another order made in the same proceedings for the striking out of their entire writ under O 18 r
19 of the Rules of the High Court 1980 ('the RHC') in addition to the setting aside of the default judgment.

The subject matter in these appeals concerned a family dispute over the ownership and management of a sawmill
in Tampin, which the plaintiffs, as administrators of the estate of Chin Sam Seong @ Chan Sam Seong, claimed to
be part of the deceased's estate, and therefore unlawfully managed by the defendants. The plaintiffs had filed on 9
November 1991 a writ of summons against the defendants without a statement of claim, but with the prayers for
declaratory reliefs, injunction and damages endorsed. Apart from the default judgment, there was also an order
made to assess damages although there was no existing order granting damages to the plaintiffs.

The principle of setting aside a default judgment under O 13 r 8 has been well established and needs no detailed
 Page 7 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

repetition. What is important to observe is that a default judgment is not a judgment on the merits. Accordingly,
when such judgment is obtained irregularly, such irregularity would be a sufficient ground by itself for setting it
aside. But where the default judgment has been obtained regularly, in order to succeed, the defendant must file an
affidavit of merits, ie the defendant must disclose by affidavit evidence that prima facie he has a defence on the
merits. Put in another way, the affidavit must disclose that he has an arguable or [*574]
triable issue on the merits (see Evans v Bartlam [1937] AC 473). The following judgment of Lee Hun Hoe CJ in
Fira Development Sdn Bhd v Goldwin Sdn Bhd [1989] 1 MLJ 40 at p 41 is also instructive:

Where judgment is entered on the failure of a defendant to take any of the procedural steps laid down under the Rules of
the High Court 1980, the court has an absolute discretion to set aside the judgment, if necessary, on terms and allow the
case to be heard on the merits. Lord Atkin stated clearly the principles in which the court should act in Evans v Bartlam
[1937] AC 473 in these words:

'… The principle obviously is that unless and until the court has pronounced a judgment upon the merits or by
consent, it is to have the power to revoke the expression of its coercive power where that has only been obtained by a
failure to follow any of the rules of procedure.'

In the instant case, the learned judge did not consider the judgment to be irregular. The Mallal's Supreme Court Practice
(2nd Ed) (Vol 1) at p 84 explains the position where the judgment is regular thus:

'The discretion will only be exercised if the affidavit supporting the application to set aside discloses facts showing a
defence on the merits; or for some very sufficient reason: Bank Bumiputra Malaysia Bhd v Majlis Amanah Ra'ayat
[1979] 1 MLJ 23; Farden v Richter (1889) 23 QBD 124.'

A defence on the merits means merely raising only an arguable or triable issue, eg contributory negligence in a running
down case in White v Weston [1968] 2 QB 647. A judgment in default is not a judgment on the merits: L Oppenheim &
Co v Mahomed Haneef [1922] 1 AC 482.

Although under O 2 r 1(1) of the Rules of the High Court 1980, non-compliance with the rules of procedure is to be
regarded as mere irregularity and not a nullity, the court, like any other discretionary powers, must exercise its
discretion to cure such procedural irregularity on correct principle. The proper approach that should be adopted on
curability should be on the basis of the principle laid down recently by Lord WoolfMR in Nicholls v Nicholls [1997]
The Times, 21 January; 147 NLJ 61 on the exercise of the discretion conferred by the English RSC O 59 r 10(3)
and s 13(3) of the Administration of Justice Act 1960:

I have cited extensively from the previous authorities to indicate that they show no common pattern of approach. The later
cases do however make it clear that it is now recognized that O 59 r 10(3) and s 13(3) of the 1960 Act do give a court the
power to rectify procedural defects both in the procedure leading up to the making of the committal order and after a
committal order has been made. Like any other discretion, the discretion provided by the statutory provisions, must be
exercised in a way which in all the circumstances best reflects the requirements of justice. In determining this, the court
must not only take into account the interests of the contemnor but also the interests of the other parties and the interests of
upholding the reputation of civil justice in general. Today, it is no longer appropriate to regard an order for committal as
being no more than a form of execution available to another party against an alleged contemnor.

The court itself has a very substantial interest in seeing that its orders are upheld. If committal orders are to be set aside on
purely technical ground [*575]
which have nothing to do with the justice of the case, then this has the effect of undermining the system of justice and the
credibility of the court orders. While the procedural requirements in relation to applications to commit and committal orders
are there to be obeyed and to protect the contemnor, if there is non-compliance with the requirements which does not
prejudice the contemnor, to set aside the order purely on the grounds of technicality is contrary to the interests of justice.
As long as the order made by the judge was a valid order, the approach of this court will be to uphold the order in the
absence of any prejudice or injustice to the contemnor as a consequence of doing so.

In the future therefore it should not be necessary to revisit the authorities prior to the decision in M v P Butler and Butler. It
should be recognized that O 59 r 10 and s 13(3) of the 1960 Act give the court a discretion which they are required to
exercise. To decline to exercise that discretion because of a technical error in the notice of application to commit or the
 Page 8 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

committal order itself, in the absence of any prejudice, is to derogate from that discretion.

On the basis of the above principle, the discretion available to this court to cure irregularities under O 2 r 1(1) of the
RHC read together with s 69(4) of the Courts of Judicature Act 1964 [the equivalent of the English O 59 r10(3)] and
as well as s 101 of the same Act which allows this court to discount 'any error, defect or irregularity whether in the
decision or otherwise, not affecting the merits or the jurisdiction of the court', should only be undertaken by the
court in the absence of prejudice. Thus defects affecting merits or the jurisdiction of the court ought not to be cured,
in the exercise of the discretionary power.

Applying the above principle to the facts of these appeals, it is clear that the default judgment (the subject matter of
the first appeal) is irregular for non-compliance with the RHC, in particular O 13 r6(1), by failing to serve a statement
of claim on the defendants. On this ground alone, the learned judge was correct in setting aside the entire default
judgment. There can be no dispute that the procedural irregularity in the failure to serve the statement of claim on
the defendants before the default judgment was entered, just as the order to assess damages in the absence of
judgment granting damages, had prejudiced the defendants and therefore beyond curability.

In my view, in dismissing the first appeal, there is no real necessity in castigating counsel for the appellants for
entering appearance without leave about two months after the default judgment was entered. The question of
leave under O 12 r 5(a) was not an issue and never argued in the High Court. It was raised for the first time in this
court, and counsel for the appellants had unwittingly in answer to questions by the court said the judgment of 2
December 1991 was a nullity which could not be so in view of the provisions in O 2 r 1 of the RHC. But a judgment
or order may of course be a nullity in a very limited number of cases, for instance where there is lack of jurisdiction
as envisaged by s 101 of the Courts of Judicature Act 1964, not because of any defects in the rules of procedure,
but because the court itself has acted in excess or without jurisdiction. Further, the disappearance of the distinction
between nullity and irregularity of judgment or order relates only to O 2 r 1(1) of the RHC, and not for non-
compliance [*576]
with the provisions of any other law including the Constitution. In any event, the very fact that the application to set
aside was made by the appellants indicated that they could not seriously claim that they were never at any time
bound by the default judgment.

On the second appeal I have had the advantage of reading the judgment in draft of my learned brother Gopal Sri
Ram JCA, and I agree entirely with his reasons for allowing the appeal against the unjustified striking out of the
appellants' writ, purely because of the setting aside of the default judgment. I fully agree that the striking out order
was completely against all principles governing O 18 r 19 of the RHC. The writ as well as the order of injunction
against the respondents should accordingly be reinstated.

2 May 1997

GOPAL SRI RAM JCA

These two appeals arise from two orders made in the same suit filed in the Seremban High Court. The appellants in
both appeals were the plaintiffs in the original action, while the respondents were the defendants. For convenience,
I will refer to the parties accordingtothe title assigned to them respectively in the court below. AppealNo669/93
(which we will throughout this judgment refer to as 'the first appeal') is in respect of the order of the learned judge
setting aside the judgment in default obtained by the plaintiffs. Appeal No 670/93 ('the second appeal') is directed
against the order of the learned judge striking out the plaintiffs writ in the suit.

These appeals were heard on 22 April 1996. At the conclusion of the arguments, the first appeal was dismissed, but
the second was allowed.

The background to these appeals is as follows.

The plaintiffs are the executors of the will of Chin Sam Seong @ Chan Sam Seong, deceased ('the deceased'). The
first plaintiff is the widow of the deceased; the second plaintiff is the eldest son.

The defendants are the beneficiaries of the deceased's estate. They are also the children of the deceased and the
first plaintiff.
 Page 9 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

One of the assets of the deceased's estate is a sawmill. It is called 'Tampin Sawmill'. The plaintiffs have the conduct
of the business of the sawmill.

In consequence of an incident that is alleged to have occurred at the sawmill on 4 November 1991, the plaintiffs, on
9 November 1991, caused to be issued a writ against the defendants on which there was indorsed a claim for
several declarations and injunctions. In substance, the declaratory relief was aimed at establishing the plaintiffs'
right to conduct the business of the sawmill without interference. The injunctive relief was directed at restraining the
defendants from interfering with the business of the sawmill and to prevent the first defendant from holding out that
he was the licensee of Tampin Sawmill. There was also a claim for damages.

On the date the writ was issued, the plaintiffs moved ex parte for several interim injunctions the effect of which was
to restrain the defendants [*577]
from interfering with the business of the sawmill. The learned judicial commissioner who entertained the plaintiffs'
ex parte summons granted the interim relief sought, but only until 16 November 1991, with a direction that the
application be heard inter partes on that date.

When the matter came on for hearing on the return date, the first defendant appeared and applied for an
adjournment to enable him to appoint counsel. The learned judicial commissioner granted this request, adjourned
the inter partes hearing of the summons to 28 November 1991, and extended the injunction to that date.

On 28 November 1991, when the summons was called on for hearing, counsel for the plaintiffs informed the
learned judicial commissioner of a telephone conversation that he had with the first defendant's solicitor on the
afternoon of the preceding day. During that conversation, counsel for the plaintiffs had been told by the solicitor in
question that he (the solicitor) had advised the first defendant not to defend and that neither he nor his client would
be appearing at the hearing of the summons. Plaintiffs' counsel then moved the court for an order that the interim
injunction be made absolute against both defendants. He also applied for an order requiring the registrar to assess
damages. No appearance to the writ having been entered to the writ, counsel undertook to file a certificate of non-
appearance.

After being so informed by counsel, the learned judicial commissioner made an order in terms of the plaintiffs'
summons and directed an assessment of damages. The order extracted from the registry of the High Court
contains the injunctions and the also a minute directing the assessment of damages. How the latter order could
have been made in the absence of a judgment awarding the plaintiff damages is a matter of pure amazement.

On 2 December 1991, the plaintiffs' solicitors filed a certificate of non-appearance, and on the same day, entered a
form of judgment in default in which all the relief claimed in the indorsement to the writ was granted.

On 28 January 1992, that is to say, some two months after the last proceedings before the judicial commissioner,
the defendants purported to enter appearance. I use the expression 'purported' advisedly, because judgment had
already been entered against the defendants by that date.

Now, although a defendant to an action has, under the terms of O12r 4(a), eight days in which to enter appearance,
he may, because of the operation of O 12 r 5(1), enter an appearance at any time before judgment is entered
against him. He may enter an appearance after judgment only upon obtaining leave of the court.

In the present case, judgment having been entered against them on 2 December 1991, the defendants required
leave of court before they were entitled to appear in form. Needless to say, no such application was ever made. But
the point does not seem to have attracted anyone's attention. When it was raised with counsel for the defendants
before this court, his response was that the default judgment of 2 December 1991 was a nullity, [*578]
and, for that reason, there was no judgment against his clients, so that the appearance entered on 28 January
1992, was good.

I will, in due course, deal with the regularity of the judgment entered against the defendants. But, for the moment, I
would deal with the fallacy in the view expressed by counsel. It must be borne in mind that the default judgment in
question is merely irregular and not a nullity. Orders and judgments made or entered by such a court, in private
law litigation, in the exercise of its coercive power upon the default of a party to a suit, even when made or entered
in breach of a rule of court or of practice, are merely irregular. They are not nullities. And it is quite wrong to
describe them as such.
 Page 10 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

Any proceeding commenced, or any order or judgment obtained, in breach of a rule of court is always subject to
the curative power of the court available under O 2 r 1 of the Rules of the High Court 1980 ('the RHC'). Whether a
particular proceeding should be cured is, of course, a matter of discretion for the court whose assistance is prayed
in aid to effect the cure. It is wrong to assume that the court is obliged in every case to overlook the breach of a rule
of court. For that would mean that a litigant may honour the Rules of the High Court more by breach rather than by
observance. This is certainly not the law.

The proper approach is for a court to accept that a breach of a rule of court renders the particular proceeding
irregular with a power in the court to excuse the non-compliance. That power, as in all matters calling for curial
discretion, is to be exercised judicially having regard to the substantial merits of a case and having particular
regard to the interests of justice. Thus, for example, to say that a judgment entered for too much is automatically
bad or is automatically curable is to take an extreme position that is unsustainable in law. Such a judgment may be
set aside if to cure it by amendment would do greater injustice to the particular defendant. On the other hand, such
a judgment may be cured by amendment if not to do thus would result in greater injustice to the plaintiff. Ultimately,
it is the objective perception of a court as to where the justice in a particular case lies that determines whether the
irregularity should be cured. If the court decides the particular case to be unfit for the exercise of the curative power,
then it may set aside the judgment, order or other proceeding.

In my judgment, the correct position is that stated by Cumming-Bruce LJ in Metroinvest Ansalt & Ors v Commercial
Union Assurance Co Ltd [1985] 2 All ER 318 at p 323:

As I construe O 2 r 1, from the moment a step in proceedings is tainted by irregularity through failure to comply with the
rules, the irregular step or document remains irregular inter partes until the matter has been brought before the court and
the court has decided in which way to exercise the jurisdiction conferred by O 2 r 1(2). Order 2 r 2 does not restrict the
powerof the court in the sense of restricting its jurisdiction, and does not have the effect of suspending the irregularity until
the application under O 2 r 2 is made. The purpose and effect of O 2 r 2 is to prescribe the procedure if and when an
opposite party decides to apply so that the court on recognizing the irregularity, may exercise its powers under r 1(2) by
taking the action of killing or curing the irregular proceeding. [*579]

For these reasons, it was therefore not open to the defendants in the present case to treat themselves as not being
bound by the default judgment of 2 December 1991.

I have made these observations in relation to the conduct of the proceedings in the court below because a reading
of the record provided has left me with the inescapable conclusion that steps appear to have been taken in
complete breach of the express provisions of the RHC, with not so much as a word of protest from anyone. Indeed,
for the purposes of this case, solicitors having the carriage of the proceedings on both sides appear to have
produced their own version of the rules of court and ignored the authoritative provisions.

Counsel and solicitors should need no reminder that rules of court exist to be complied with by obedience and not
by breach. Whilst a particular departure from a rule of court may have to be examined on its own merits, there
ought not to be, as was in this case, a wholesale disregard of them.

Returning to the mainstream, on 31 January 1992, the defendants took out a summons by which they sought to set
aside only so much of the order as directed an assessment of damages. This was followed by a second summons
dated 1 April 1992, by which they applied to have the writ struck out on the ground that the indorsement upon it did
not disclose any cause of action. Both summonses came up for hearing before the learned judge in chambers on
23 July 1992. After hearing arguments, he dismissed both applications, but granted an application for further
argument upon them in court. When the summonses came on for further argument in court on 12 August 1992,
counsel asked to put in written submissions and the learned judge acceded to this request.

The learned judge delivered his decision on 28 October 1993. He reversed the order he had earlier made in
chambers and set aside the whole of the judgment in default dated 2 December 1991. He also struck out the writ.
Consequently, the injunctions obtained by the plaintiffs on 9November1991, and confirmed by the learned judicial
commissioner on 28 November 1991, fell to the ground.

The first question I propose to deal with is whether the learned judge was right in setting aside the judgment in
default of appearance in toto.

Encik Das who appeared for the plaintiffs before this court, but not in the court below, advanced two main reasons
 Page 11 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

in support of his argument that the learned judge was wrong in setting aside the judgment in default. I will outline
these in turn.

First, all that the learned judge had before him was a summons to set aside only the order directing the
assessment of damages. There was never any challenge by the defendants to so much of the judgment which
decreed specific relief. He ought therefore to have confined himself to the terms of the application before him and,
as he was in agreement with the defendants' arguments, he should have set aside only that portion of the order to
assess damages. He went too far in setting aside the default judgment in its entirety. Those then are the first set
of arguments. [*580]

The second main submission is based upon the doctrine of estoppel. The defendants had by their conduct led the
plaintiffs to believe that the action will not be defended. The contents of the telephone conversation which the
defendants' solicitors had with the plaintiffs' solicitor on 27 November 1991, and which was related by the latter to
the learned judicial commissioner the following day, accompanied by the defendants' failure to enter a form of
appearance, constitutes material sufficient to support an estoppel. To this may be added the fact that the plaintiffs,
encouraged by the defendants' conduct proceeded to enter judgment in default. Having thus conducted
themselves, it was not open for the defendants now to challenge the default judgment. So much then for the
second submission of counsel.

I will now express my views upon each of the foregoing submissions.

Taking the first argument, it is beyond dispute that the plaintiffs, by the indorsement to the writ, principally claimed
specific relief. The claim for general damages was a mere adjunct to the main relief. The defendants admittedly did
not enter an appearance to the writ. But did that entitle the plaintiffs to enter judgment in default in the form in
which they did? The answer to that question must, I think, be derived from the relevant rule of court that governs a
case such as the present. It is common ground that that rule is O 13 r 6(1). It reads as follows:

6 (1) Where a writ is indorsed with a claim of a description not mentioned in rr 1 to 4, then, if any defendant fails to
enter an appearance, the plaintiff may, after the time limited for appearing and upon filing an affidavit proving due
service of the writ on that defendant and, where the statement of claim was not indorsed on or served with the writ,
upon serving a statement of claim on him, proceed with the action as if that defendant had entered an appearance.

The wording of the rule makes it plain that, in the present case, the plaintiffs were clearly not entitled to enter
judgment in the form in which they did. Since the conditions precedent prescribed by O 13 r 6(1) were absent, the
judgment entered against the defendants was irregular and was therefore liable to be set aside. I say 'liable',
because, as earlier observed, there is power in the court to permit a judgment to stand albeit that it was obtained in
breach of a rule of court or of practice.

In the present case, it is necessary to see the purpose of the rule in breach of which judgment was entered. If the
requirements of O 13 r 6(1) are a mere technicality, as was contended by En Das, then the judge ought to have
properly disregarded the breach and permitted the judgment to stand. However, I find that both principle and
authority are against counsel.

As for authority, I need go no further than the decision of the Supreme Court in Lam Kong Co Ltd v Thong Guan &
Co (Pte) Ltd [1985] 2 MLJ 429. That was a case which concerned O 13 r 12 of the Rules of the Supreme Court
1957, which, in substance, is not dissimilar to O 13 r 6(1). The plaintiff in that case had, in its specially indorsed writ,
claimed specific performance of a contract for the sale of certain lands and for ancillary relief. The defendant failed
to enter an appearance. The plaintiff [*581]
then entered a judgment form, inter alia, for the delivery up of the titles to the lands in question as well as valid
and registrable transfers in respect of those titles. An application by the defendant to have the default judgment set
aside was dismissed at first instance. The defendant then appealed to the Supreme Court which allowed the
appeal.

Abdul Hamid CJ (Malaya) – later Chief Justice of Malaysia – when delivering the judgment of the Supreme Court,
after setting out the proper steps that ought to be taken in a case to which O 13 r 12 applies, said (at p 431):

It is to be observed that the effect of the rule was to disentitle the respondents from entering default judgment on a writ
specially indorsed for specific performance. They were to proceed in the manner provided by the Rules and that was to set
down the action on motion for judgment. It was only on the further step being taken that it was open for the court or judge
 Page 12 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

to consider giving judgment as upon the claim the court or judge should consider the respondents to be entitled. At that
point of time, therefore, judgment in default was not only given in breach of r 12 but had resulted in a failure to comply with
r 11 of O 27. In the circumstances, we are constrained to hold that the breach and the non-compliance were not merely
irregularities but fundamental defects. The fundamental defect was not, in our view, curable as the effect of the breach and
non-compliance was to defeat the right of the other party to the action. (Emphasis added.)

The proposition that is to be gathered from the decision in Lam Kong is this. A judgment in default of appearance
entered by a plaintiff, or, for that matter, a counterclaiming defendant, in breach of the terms of O 13 r 6(1), may be
set aside ex debito justitiae. And on an application of the proposition to the facts of the instant appeal, there is no
doubt whatsoever that the judgment in default obtained in the present case was fundamentally flawed.

Encik Das, however, argued that it is not every judgment in default entered in breach of the provisions of O 13 r
6(1) that may be said to be fundamentally defective. He said that a court should uphold such a judgment in cases
where to countenance an application to have it set aside would amount to an abuse of the court's process. In
support of this submission, counsel cited the judgment of Robert Goff J (later Lord Goff of Chievely) in Stewart
Chartering Ltd v C & O Managements SA & Ors [1980] 1 All ER 718 which was approved and applied by the
English Court of Appeal in Jet West Ltd & Anor v Haddican & Ors [1992] 1 WLR 487. I would observe that both
cases were concerned with the issue of a Mareva injunction in aid of a judgment. I would also observe that in
Stewart Chartering, the English Court granted leave to enter judgment in default despite the terms of O13r 6(1) in
order to prevent an abuse of its process, and after the chief clerk in the judgment room had declined to accept a
default judgment form in the ordinary way.

While I agree with counsel that a court may grant leave to enter judgment in disregard of the provisions of O 13 r
6(1) to prevent a defendant from abusing the court's process by resorting to that rule, I find no room to apply that
principle in the present case. Plainly stated, there was no leave obtained from the judicial commissioner to enter
judgment [*582]
for the several heads of specific relief. Further, for reasons that will appear clear in a moment, this is not a case
where the defendants were seeking to abuse the court's process by resorting to the rule presently under
consideration. If anything, it was the plaintiffs who abused the court's process by securing an order to assess
damages without the benefit of a judgment in their favour.

The philosophy underlying O 13 r 6(1) is that specific relief is, by its very nature, discretionary. A defendant may
well decide not to defend an action in which such relief is claimed in the honest belief that he has no defence upon
the question of liability. But that does not relieve the plaintiff from delivering his statement of claim and satisfying the
court, upon a motion for judgment, that the case is a fit one for the grant of specific relief.

Cases may occur where the defendant may have infringed a plaintiff's right: yet the plaintiff may be denied
declaratory relief upon settled principles governing the exercise of discretion, eg that he has an adequate
alternative remedy which he has not resorted to. A defendant who has failed to enter an appearance to an action for
specific relief is not precluded from appearing in person or by counsel at the hearing of the motion for judgment for
the purpose of contending that the particular case is one in which discretion should be exercised against the plaintiff
and that specific relief ought to be denied him.

When viewed in this fashion, it is not difficult to see why O 13 r 6(1) is worded in the way in which it appears. The
rule exists to preserve the discretion of the court in actions for specific relief despite the non-appearance of a
defendant. It is not a mere technicality, as suggested by counsel, but has to do with policy considerations that have
evolved through the exercise of jurisdiction by a court of equity. To deprive a defendant the right of appearing upon
the motion for judgment and arguing that discretion ought not to be exercised in a plaintiff's favour is a serious
matter. It constitutes the breach of a substantive right forming part and parcel of the doctrine of procedural fairness.
And the entry of a form of judgment in default in a case to which O 13 r 6(1) applies has the effect of withholding,
from a defendant, without the court's sanction, the procedural fairness to which he is entitled.

The next question that arises is whether the learned judge was right in reversing the order he made in chambers
and in setting aside the whole of the judgment, when the summons before him sought to set aside only so much
of the judgment that directed the assessment of damages. I think that he was.

This is a case in which the plaintiffs had absolutely no right whatsoever to obtain an order for the assessment of
damages. There was, as earlier observed, no judgment for damages against the defendants on 28 November
1991. It is elementary law that there can be no assessment of damages in the absence of a judgment granting
 Page 13 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

damages. Such a judgment did not come until 2 December 1991. So, here is a case where the cart had been
squarely placed before the horse. The judgment for the assessment of [*583]
damages was found in a judgment which was flawed in other respects. The learned judge was therefore perfectly
entitled, in the interests of justice, to take cognizance of the breach of O 13 r 6(1) and to set aside the whole of the
offending judgment. The authority of a court to act suo motu to set aside a judgment entered pursuant to its
coercive power must, no doubt, be exercised with caution. But it is there to be exercised in appropriate cases; and I
am satisfied that the case at hand was indeed a proper case.

I now turn to consider the argument mounted upon the doctrine of estoppel. The answer to the complaint made by
counsel lies in appreciating the true nature of the doctrine. As observed by Mohd Azmi FCJ during argument, the
doctrine is essentially equitable in nature. It is a rule by which justice is done according to the facts and
circumstances of a particular case and its operation depends much upon the conduct of the parties. It is therefore
extremely flexible in its application because it moulds itself to fit a particular fact pattern. Accordingly, the categories
of cases to which the doctrine applies are not closed.

In the context of litigation, it usually arises where a party to an action has at least two alternative and mutually
exclusive courses open to him. If by words or conduct he elects to pursue one of them and thereby leads his
opponent to believe that he has abandoned the other, he may, if the circumstances so warrant, be precluded from
later changing course. Decisions upon the application of the doctrine to litigation are but mere illustrations of the
broader proposition. Indeed, this is true of all cases where the doctrine has been applied to other spheres of human
activity.

For present purposes, it is sufficient to draw from two such examples.

In Meng Leong Development Pte Ltd v Jip Hong Trading Co Pte Ltd [1985] 1 MLJ 7, the doctrine was applied to the
following circumstances. The plaintiff, after having lodged a caveat, brought an action for specific performance of a
contract for the sale of land. At first instance, he failed to obtain specific relief. He was, however, awarded damages
for breach of contract. The defendant appealed to the Court of Appeal of Singapore for a reduction in the size of the
award. It was open to the plaintiff to cross-appeal, but he chose not do so. Instead, he elected to pursue with
execution of the award of damages. The defendant was able to obtain the plaintiff's agreement to withhold
execution only upon securing the judgment sum in the hands of a banker upon fixed deposit. At the hearing of the
appeal, the plaintiff requested for and obtained leave to cross-appeal against the refusal of specific performance.

The Court of Appeal, unaware of the arrangement that had been arrived at between the parties on the question of a
stay, granted the leave sought, dismissed the defendant's appeal and allowed the plaintiff's cross-appeal. Upon the
defendant's further appeal to the Privy Council, the Board allowed the appeal and restored the order of the trial
judge. The Board held that the plaintiff, by his conduct in calling for the damages awarded to him, had
demonstrated that it was not pursuing its claim for specific performance. He was accordingly estopped from doing
so before the Court of Appeal. [*584]

The majority judgment of the Judicial Committee was delivered by Lord Templeman who said (at p 11):

In Spencer Bower and Turner 'The Law relating to Estoppel by Representation' (3rd Ed, 1977), para 310 summarizes the
doctrine of election as applied to the law of estoppel in these terms:

'Where A, dealing with B, is confronted with two alternative and mutually exclusive courses of action in relation to such
dealing, between which he may make his election, and A so conducts himself as reasonably to induce B to believe
that he is intending definitely to adopt the one course, and definitely to reject or relinquish the other, and Bin such
belief alters his position to his detriment, A is precluded, as against B, from afterwards resorting to the course which he
has thus deliberately declared his intention of rejecting. It is of the essence of election that the party electing shall be
"confronted" with two mutually exclusive courses of action between which he must, in fairness to the other party, make
his choice.'

In the present case, the purchaser could not take the damages and obtain specific performance. By demanding and
accepting the deposit of the damages, the purchaser chose to adopt the order of the trial judge and relinquished the right to
appeal for that order to be set aside and for specific performance to be substituted. The vendor altered its position to its
detriment by raising and paying $297,500 on 12 November 1981. The vendor has been deprived of that sum ever since.
After the judgment of AP Rajah J, the purchaser was indeed confronted with two alternative and mutually exclusive
 Page 14 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

courses of action, namely to enforce the award of damages or to seek to persuade the Court of Appeal to set aside the
award of damages and to substitute the remedy of specific performance.

By procuring the payment of the damages of $297,500, the purchaser accepted the judge's order. If the purchaser had
served a notice of appeal seeking specific performance or had informed the vendor that the purchaser intended to seek an
order for specific performance from the Court of Appeal, the vendor would have been able to refuse to place the damages
on deposit and would have been entitled to renew and to succeed in an application for a stay of execution with regard to the
damages pending the hearing of the purchaser's appeal seeking specific performance.

Paragraph 322 of the cited work by Spencer Bower and Turner relating to election in the conduct of litigation is in these
terms:

'Where a litigant has taken the benefit, in whole or in part, of a decision in his favour, he is precluded from setting up
in any subsequent proceedings between the same parties, by way of appeal or otherwise, that such decision was
erroneous, or, though correct as to the part which was in his favour, was wrongly decided as to the residue.'

Mr Nugee submitted that this statement is not justified by authority but it appears to be good law and good sense. Here the
purchaser, by obtaining the deposit of the damages of $297,500, took the benefit of the decision in its favour made by AP
Rajah J and thereby precluded the purchaser from arguing that his decision was erroneous.

The second authority is Langdale & Anor v Danby [1982] 1 WLR 1123, which concerned an application for
summary judgment decreeing specific performance. At the hearing of the summons before the judge at first [*585]
instance, the defendant expressly admitted that no impropriety was alleged against the first plaintiff, who was a
solicitor. The judge entered summary judgment. On appeal, the English Court of Appeal admitted further evidence
which in effect amounted to a withdrawal of the admission made before the judge. The Court of Appeal, having
expressed its satisfaction that there was no material before the judge to merit a trial, held that there were triable
issues upon the fresh evidence admitted before them. Leave to defend was accordingly given. The plaintiffs
appealed to the House of Lords which allowed the appeal and restored the decree of specific performance granted
by the judge.

In a speech in which the other members of the House concurred, Lord Bridge of Harwich said (at p 1135):

My Lords, with all respect, I cannot agree with any of the reasons suggested for holding that the conduct of Mr Danby's
case before Oliver J and, in particular, the admission that no impropriety was attributed to Mr Langdale did not estop Mr
Danby from alleging, nearly two years later, that the judgment of Oliver J could be reversed on grounds which were not
taken before Oliver J and which directly accused Mr Langdale of improper conduct as a solicitor. In this context, I confess I
simply do not understand the distinctions sought to be drawn by Dunn LJ between the conduct of the case before Oliver J
and Mr Danby's subsequent delaying tactics or between the grant of leave to appeal out of time and the decision of the
appeal itself, or that drawn by Fox LJ between matter going to costs and matter going to substance.

As I see it, the direct result of the conduct of Mr Danby's case before Oliver J was to permit the Langdales to obtain
summary judgment. They then spent nearly two years in time and a great deal of money in costs in the course of enforcing
that judgment. True it is that part, but part only, of the costs so incurred could be and were set off against the balance of
the purchase price of the cottage due to Mr Danby, probably Mr Danby's only significant resource. But now, if the Court of
Appeal judgment were to stand, the Langdales would face a full scale trial against a legally aided defendant in which,
though they succeeded, they would have little prospect of recovering any of their costs. Looking at this history in a common
sense way, it seems to me beyond argument that the Langdales will have acted to their detriment, on the faith of the
conduct of Mr Danby's case which enabled them to obtain summary judgment, by spending large sums to enforce that
judgment, if they are now denied the benefit of it by allowing Mr Danby to set up a case which conflicts radically with the
case presented on his behalf before Oliver J. Independently of any other ground I would, therefore, hold Mr Danby
estopped from arguing the case on which he succeeded in the Court of Appeal.

With one qualification that I shall state in a moment, the passages above-quoted (from the opinion of Lord
Templeman in Meng Leong, and the speech of Lord Bridge in Langdale) reflect the consequences that flow upon an
application of the doctrine of estoppel to the conduct of litigation.The qualification I make is this. The approach to
the doctrine of estoppel, in particular to the requirement of there having to be 'a detriment', has, by the flow of
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LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

authority that has come after the decisions in Langdale and Meng Leong, including the decision of this court in
Boustead Trading [*586]
(1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331, been re-stated in broader terms to
accurately reflect the true nature of the doctrine.

Accordingly, the global question which a court must ask itself is this: is it just and equitable that the particular litigant
(against whom the estoppel is raised) should succeed, given the totality of the facts and circumstances of the case?
If the answer to that question is in the affirmative, estoppel does not bite: if the answer is in the negative, then it
does.

In the present case it was argued that it is not open to the defendants; they having encouraged the plaintiffs to
believe that the action will not be contested; to challenge any judgment entered in the proceedings, however
irregular that judgment may be. But this submission overlooks two matters of vital importance.

First, as was observed by the Chief Judge of Malaya during argument, it does not appear sufficiently clear whether
the defendants were content in not opposing the particular summons for the interlocutory injunction or whether they
were throwing up their hands in abject submission to the whole action. In the absence of that level of clarity which
the law demands in cases of estoppel, it is difficult to see how the doctrine could operate against the defendants in
the present case.

Second, the plaintiffs, in order to be able to argue that it would be inequitable to permit the defendants to retreat
from the position earlier adopted, must demonstrate that they themselves have acted equitably. For, he who comes
to equity must come with clean hands; and the plaintiffs' conduct, when objectively viewed, does not meet the test
housed in this maxim of equity.

At most, the plaintiffs were, when they appeared before the judicial commissioner on 28 November 1991, entitled to
a confirmation of the injunction. However, they went on to obtain an order directing the senior assistant registrar to
assess damages. If it offended their conscience, as it ought to have done, it was open for them to approach the
court and to have the offending part of the order expunged. But they did not do so. Indeed, they went so far as to
resist the defendants' application to set aside the order directing assessment, thereby evincing an intention to
assert the correctness of their actings.

The plaintiffs were, therefore, guilty of unconscionable conduct and this had the effect of releasing the defendants
from any estoppel that may have held them in its grip. Once thus released, the parties were placed on an equal
footing viz-a-viz the litigation. Thereafter, it was open to the defendants to pursue any and all courses made
available to them by adjectival law to rid themselves of the offending judgment.

In my opinion, the learned judge was, for the reasons given, quite correct in setting aside the whole of the
judgment in default obtained by the plaintiffs on 2 December 1991. Since the arguments raised in support of the
first appeal did not merit a response from counsel for the defendants, he was not invited to make any. [*587]

With that, I now turn to the second appeal directed against the order of the learned judge striking out the plaintiffs'
writ on the ground that it failed to disclose a cause of action. The primary argument advanced by the defendants in
support of their application; an argument which found favour with the learned judge; was the plaintiffs' failure to
deliver a statement of claim after service of the writ.

The rule of court relied upon by the defendants in support of this argument is O 18 r 1 of the RHC, which reads as
follows:

(1) Unless the Court givesleave to the contrary or a statement of claim is indorsed on the writ, the plaintiff must serve a
statement of claim on the defendant or, if there are two or more defendants, on each defendant, and must do so either
when the writ, or notice of the writ, is served on that defendant or at any time after service of the writ or notice but
before the expiration of 14 days after that defendant enters an appearance.

On a proper construction of this rule, a plaintiff, may serve his statement of claim with his writ and certainly not later
than 14 days after a defendant has entered an appearance.

In the present case, neither defendant entered an appearance until after judgment had been signed. The rule upon
which the defendants' primary argument is based has therefore no application to the facts that exist here. That
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LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

should indeed be the short answer to submissions of counsel for the defendants. However, he went on to argue that
the indorsement was rightly struck out under O 18 r 19 because it did not disclose any reasonable cause of action.

The point taken by En Lim Kem Thuan for the defendants is sufficiently met by the decision in Lim Hean Pin v
Thean Seng Co Sdn Bhd [1992] 2 MLJ 10. It is an authority that I prefer to those cited by counsel. There, Edgar
Joseph Jr J (now FCJ) was faced with an indorsement in a writ which read as follows (at p 26E-I):

The plaintiff brings this action for himself and for and on behalf of all the other shareholders of the first defendant other than
the defendants herein who are also shareholders of the first defendant in this action. The plaintiff claims for:

(i) a declaration that the act of refusal by the second to seventh defendants in objecting (to) the proxy [form] lodged by
the plaintiff at the first defendant's 42nd annual general meeting is (was) wrongful in law and is (was) an abuse of their
powers as directors;

(ii) a declaration that the annual general meeting of the first defendant held on 21 January 1991 is (was) null and void
and all resolutions passed thereto (should) be set aside accordingly;

(iii) an injunction against the first to seventh defendants from implementing and/or exercising their powers to effect the
resolutions passed at the 42nd annual general meeting of the first defendant held on 21 January 1991 or any
adjournment thereof;

(iv) a declaration that the extraordinary general meeting scheduled for 31January 1991 and the resolution intended to
be passed thereat to [*588]
amend art 56 of the articles of association of the first defendant is (was) an abuse of the powers of the fourth and fifth
defendants as directors of the first defendant company and is (was) not for the benefit of the first defendant company
and is (was) a fraud on the minority shareholders of the first defendant company;

(v) an injunction against the first to seventh defendants whether by themselves, their servants or agents from
proceeding with or holding the extraordinary general meeting of the first defendant scheduled on 31 January 1991 and
from in any manner altering or amending the articles of association of the first defendant company;

(vi) damages for breach of duties;

(vii) interest on damages;

(viii) costs; and

(ix) such further or other reliefs.

Addressing an argument that the foregoing indorsement did not disclose a cause of action and ought therefore to
be struck out, his Lordship said (at p 27A—B):

In my view, paras (i) and (iv) of the endorsement in the amended writ of summons did disclose a cause of action. In any
event, the lengthy affidavit of the plaintiff affirmed on 28 January 1991 (encl 5) filed in support of the amended ex parte
summons-in-chambers (encl 4) pursuant to which I had granted the injunctions had identified a legal right sufficient to give
rise to a justiciable cause of action (see Utusan Melayu (Malaysia) Bhd & Anor v Chan Tse Yuen [1989] 1 MLJ 185). This
ground therefore failed.

In the present case, the declarations contain a statement of facts that adequately identify a cause of action. As
executors of the deceased, the plaintiffs were entitled – indeed were duty bound – to protect the assets of his
estate. That they were executors and that their management of the Tampin Sawmill had been interfered with and
that there may be continued interference appears quite sufficiently from the declarations and injunctive relief sought
in the indorsement and from the affidavit filed in support of the summons for the ex parte injunctions.

There is no dearth of authority dealing with the approach that a court should take when exercising its summary
jurisdiction under O 18 r 19. The unanimous view is that the summary power ought not to be invoked save in a plain
 Page 17 of 17
LAI YOKE NGAN & ANOR v CHIN TECK KWEE & ANOR

and obvious case: see Bandar Builder Sdn Bhd & Ors v United Malayan Banking Bhd [1993] 3 MLJ 36, per Mohd
Dzaiddin SCJ (now FCJ).

An examination of the record provided demonstrates that this is not such a case. There are several issues of law
that require mature consideration. And there are several issues of fact that are capable of resolution only after
taking viva voce evidence.

Having given this matter careful consideration, I am convinced that the learned judge was quite wrong in striking out
the writ in this case. There was simply no justification for doing so.

Accordingly, the second appeal was allowed, the judge's order was set aside and the writ restored to file. It was
also ordered that the injunctions [*589]
which had fallen in consequence be reinstated. The plaintiffs were awarded the costs of the appeal, and the
deposit paid into court by them was ordered to be refunded to them. The plaintiffs were also granted leave to serve
their statement of claim within two weeks from the date of the order made herein.

As for the first appeal, this was dismissed with costs. All orders made by the judge were affirmed. The defendants
were awarded the costs of the appeal. The deposit paid into court by the plaintiffs was ordered to be paid out to the
defendants to account of their taxed costs.

First appeal dismissed; second appeal allowed.

Reported by Wong Rhen Yen

End of Document